Report from Cityscape Saudi Arabia

This week, the Jeddah Chamber of Commerce hosted an inaugural event, starting on Monday and calling itself the region’s “premier international real estate investment and development event”. This was Cityscape Saudi Arabia, a follow up to its namesake held in Dubai each year. Now, there’s a proverb in Arabic which reads “arrogance is a weed that grows mostly on a dunghill”. For some, it might be a little extreme to suggest there’s a lot of arrogance in the UAE, and that the whole Dubai development and investment market is a dunghill; but for some who’ve worked there, there could be more than a modicum of truth in this. What struck me immediately in attending the first annual cityscape in Saudi Arabia, was the lack of pomp and ego surrounding the event which was conspicuous at its predecessor in Dubai. Could it be said that this more conservative and considered event is a serious indicator of a more solid and sustainable construction market? I think so.

The event itself was considerably smaller than the UAE conference with only a hundred or so exhibitors versus the 1,000-plus in Dubai. However, the atmosphere of the event was markedly more optimistic than at Dubai’s last Cityscape in October. One had a certain uneasy feel about Cityscape Dubai as the rest of the world entered global recession – people posed the question, would the Dubai market stand up and weather the financial sand storm or would it crumble? People were unsurprisingly hesitant in making commitments to investment and recruitment at that time, and with the benefit of hindsight, who could blame them? Cityscape Saudi Arabia had a totally different feel, though. Saudi has clearly demonstrated itself as the financial powerhouse of the Middle East and remains committed to a substantial programme of private and government investment in housing and infrastructure. This was apparent at the event and most of the people I spoke to said the first day alone had precipitated some very solid and tangible enquiries from prospective clients. As a whole, the exhibition seemed somehow more conducive to doing serious business and less about ostentatious exhibitionism with serious "buyers" rather than on the hoof "chancers".

An individual I had discussions with at a large engineering consultancy described "the kingdom", as being like a 500lb gorilla which had been sitting in the room and everyone had chosen to ignore. Now, with the rest of the GCC wrestling with the slowdown, everyone is sitting up and paying attention to this oil-rich behemoth with enthusiasm abounding at the conference. But, despite Saudi Arabia being ranked by Forbes as one of the world’s easiest countries to do business with, most companies I met with were still at a very embryonic stage of setting up shop there.

On considering this, one question I posed myself at the close of the day though was, “is the country going to be the saviour of companies who’ve been battered in Dubai and provide much needed stability for all?” For many a firm there is certainly a lot of scope, however, despite the "ease of doing business" Saudi still remains a difficult location in other respects. A consideration which follows the ongoing trend of redundancies and retrenching excess head count from other Arab states is - will company staff follow management’s enthusiasm to do business there, and relocate? Clients in Saudi seemed keen at the event to exploit the plentiful experience and technical skills British companies have to offer, but with the overt cultural sensibilities of the locals, significant living restrictions and lack of abundant recreational facilities, will the kingdom tempt the headcount of qualified staff required? Possibly not. Salaries are higher than in the rest of the region but consultancies don’t offer anywhere near the uplift or leave rotation afforded by the contractors. So, for professional consultants the draw will have to be more than financial. Whether job security is a significant enough driver to prompt the move remains to be seen.

It’s irrefutable that Saudi represents a golden opportunity and Cityscape demonstrated some of the potential. But, who will benefit? We’ve seen the dominance of UK consultant firms and contractors in other regions of the Middle East but whether this success can be replicated in Saudi is yet to be demonstrated.